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FTC Epic Show Trial a Sign of Things to Come

12/11/12

By Ken Magill

The Federal Trade Commission held a show trial last week.

It announced it settled charges with an ad network that exposed the names and addresses of more than 70,000 50-plus-year-old men whose browsing history indicates their weenises don’t perform on command quite like they did in their 20s.

Oh wait. The FTC didn’t announce anything like that.

The FTC announced last week it had settled charges with an ad network that hadn’t hurt or embarrassed anyone.

“An online advertising company agreed to settle Federal Trade Commission charges that it used ‘history sniffing’ to secretly and illegally gather data from millions of consumers about their interest in sensitive medical and financial issues ranging from fertility and incontinence to debt relief and personal bankruptcy,” a press release from the FTC said.

The company in question, Epic Marketplace, apparently used a technique whereby they could glean sites individuals had visited and serve ads accordingly.

The FTC alleged that depending on which domains a consumer had visited, Epic assigned them an interest segment such as “Incontinence,” “Arthritis,” “Memory Improvement,” and “Pregnancy-Fertility Getting Pregnant.”

Epic used these categories to send consumers targeted ads.

Wait. So what’s the problem here? Epic helped companies find people who would be likely to want their products and services and served ads accordingly?

How is that a problem?

It’s not and the lawyers at the FTC know it.

So how did Epic get busted? It didn’t follow its privacy policy to the letter, that’s how.

In its privacy policy, Epic reportedly stated it would collect information surrounding visits only to the 45,000 sites in its network.

According to the FTC, the so-called history sniffing allowed Epic to determine whether a consumer had visited any of more than 54,000 domains, including pages relating to fertility issues, impotence, menopause, incontinence, disability insurance, credit repair, debt relief, and personal bankruptcy.

Notice the FTC uses every alarm word in the sensitive-information arsenal. But it’s all one big red herring.

Postal direct-mail lists are readily available of people who fall into each and every one of those categories—names and addresses included.

The FTC says nothing about Epic having identified anyone or having exposed anyone’s sensitive personal information.

Epic simply made the mistake of failing to glean information from site visits only within its network as stated in its privacy policy.

No one got hurt. And some weenises are probably working more like they should as a result.

For the complete idiot’s take on the Epic settlement, we turn to Andrew Leonard, a staff writer at Salon.com.

“[W]hat this incident tells us is that online advertisers place a premium on figuring out exactly what we’d probably desire to keep most secret from outside eyes, and they are willing to exploit any means necessary to get that information,” he wrote. “For every new form of ‘history sniffing’ that gets discovered and cracked down upon, how many are still under the radar? How many have yet to even be invented?”

Pant, pant.

Yes, Andrew, that’s exactly how online advertisers operate. They want access to all of our secrets so they can publish them, embarrass and anger us, and never sell anything to anyone again.

By the way, which network is Salon.com part of?

Well, lookee here, straight from Salon.com’s privacy policy under the subhead “advertising:”

“We use third parties such as network advertisers to serve advertisements on our Site. Network advertisers are third parties that display advertisements based on your visits to our Site and other websites you have visited. This enables us and these third parties to target advertisements to you for products and services in which you might be interested.”

Andrew should resign on principle. Or at the very least, he should talk to someone on the business side of Salon.com and find out what prevents his paychecks from bouncing.

As usual in the upside down world of privacy zealotry, the FTC’s settlement with Epic isn’t about consumer protection at all.

It’s apparently about a legacy. FTC Chairman Jon Leibowitz’s legacy to be exact.

A source in a position to know told me several FTC staffers said Leibowitz wants a legacy. And with the telemarketing do-not-call list being considered internally the greatest consumer protection achievement ever by the FTC, Leibowitz sees a do-not-track mechanism for online behavioral advertising as his shot at a similar achievement—never mind that the two are nothing alike.

And remember, this is the man who posited that as a result of behavioral advertising, someone who buys a deep fryer online could see his health insurance rates rise.

But what’s common sense when there’s a legacy at stake?

Epic has been made an example of and will be held up as an example of how industry self-regulation doesn’t work and why do-not-track with the FTC as its enforcer is necessary.

And don’t blame Epic. If it wasn’t Epic, it would have been another company.

In fact, if my source is right, look for more show trials to come.

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Terms: Feel free to be as big a jerk as you want, but don't attack anyone other than me personally. And don't criticize people or companies other than me anonymously. Got something crappy to say? Say it under your real name. Anonymous potshots and personal attacks aimed at me, however, are fine.

Posted by: Stephanie Miller
Date: 2012-12-11 17:08:58
Subject: More is already here!

Ken, great article as usual, thanks. The threats are real to data driven marketers. Congress and FTC are already threatening to remove our ability to use consumer data responsibly. More on the threat and what the DMA is doing is here: www.the-dma.org/ddmi.

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